Generally, the existence of a(n) ____ option reduces the downside risk of a project and should be considered in project analysis.
A) designed-in
B) abandonment
C) investment timing
D) output expansion

Question

Quizplus · Accepted Answer

Abandonment options allow a company to abandon a project if it does not perform as expected or if market conditions change. Including this option in project analysis helps to reduce the downside risk of a project, making it a valuable consideration.

Generally, the Existence of A(n) ____ Option Reduces the Downside